AGSA Strategic Plan and Budget 2014-2017 Presentation to SCoAG February 2014

1. AGSA Strategic Plan and Budget 2014-2017 Presentation to SCoAG February 2014

2. Reputation promise / mission The Auditor-General of South Africa has a constitutional mandate and, as the Supreme Audit Institution of South Africa, exists to strengthen our country’s democracy by enabling oversight, accountability and governance in the public sector through auditing, thereby building public confidence.

3. Presentation Outline • Overview of AGSA’s strategic objectives • Main focus areas in the Strategic Plan • Summary of Strategic Goals and Objectives • Strategic Risk Profile • Strategic goals, objectives and performance measures with strategic initiatives • Sustainability Strategy • Budget 2014-17

4. Summary of Strategic Goals and Objectives Commitments Strategic objectives Impact Simplicity, clarity and relevance of our messages Improving the lives of SA citizens through executing our constitutional mandate of strengthening our country’s democracy • Make value-adding recommendations to auditees • Maintain excellent quality of auditing • Make certain that our messages reach all stakeholders Visibility of leadership • Establish, maintain and own stakeholder relationships to encourage clean administration • Execute the organisational mandate economically, efficiently and effectively • Ensure sufficient funding for the achievement of the mandate while maintaining our independence Funding Strengthen our human capital • Build a motivated, high-performing and diverse workforce. Create access to the relevant skills and knowledge required for our work Lead by example • Adhere to standards of excellence for clean administration • Continually improve the timeliness of AGSA reports • Maximise the AGSA’s contribution to transformation Sustainable organisational practices

5. Focus Areas In The Strategic Plan • Integration of our various types of audit to holistically assess shortcomings in financial management, compliance and performance. • Increased research and consultations to confirm the required growth in performanceauditing and relevant topics and areas for such auditing • Continual engagement with those charged with governance in public sector to encourage clean administration

6. Focus Areas In The Strategic Plan • Optimisation of the audit fees • Exploring ways to collect debt more effectively; • Intensifying the learning and development initiatives

7. Strategic Risk Profile Strategic risks Strategic goals

8. Goal 1: Simplicity, clarity and relevance of messages Objective 1: Provide value-adding recommendations to stakeholders based on audit results Complementing the quality of the message with the quality of the audit process Objective 2: Continued excellence of the quality of audits performed

9. Goal 1: Simplicity, clarity and relevance of messages Objective 1: Provide value-adding recommendations to stakeholders based on audit results Note: Internal products will be rated according to quality and timelines agreed with the relevant line manager.

10. Goal 1 – Main activities / initiatives Enhance the packaging and positioning of our messages and the timing and structure of our general reports Conduct interim audits of the annual performance plans Continue to oversee and influence the audit process where we opted not to conduct the audits - to ensure the required quality and depth of the audits Increase the number of audits of state-owned companies, universities and FET colleges

11. Goal 1 – Main activities / initiatives Organic integration between regularity auditing and the specialised units for performance auditing, investigations and information systems auditing. Increased access to specialised advice, and specifically legal expertise provided to the audit teams to deal with unique issues arising during the audit process. Optimising the efficiency of the audit process by reviewing the existing audit practices, the structures and the resources used in audits, the use of contracted firms, as well as the scope and impact of the use of technology on the audit.

12. Goal 1: Simplicity, clarity and relevance of messages Objective 2: Continued excellence of the quality of audits performed

13. Goal 1 – Main activities / initiatives Constantly raise and maintain awareness of the importance of the quality of audits. Continue with proactive pre-issuance reviews on selected engagements. Performindependent post-issuance reviews (incl. those performed by contracted firms for adherence to the International Standards on Auditing. Implement and monitor policies and procedures in respect of all elements of ISQC1. Continuously benchmark our audit practices internationally and obtain assurance from independent external bodies.

14. Goal 2: Visibility of leadership Objective: Develop stakeholder relationships to encourage clean administration

15. Goal 2 – Main activities / initiatives Optimise the return on investment of our interactions with stakeholders by concentrating on the impact of our engagements. Pursue high-quality interactions – create, own, manage and sustain relationships. Re-evaluate and tailor our engagements to focus on those stakeholders that display willingness to improve. Implement detailed tracking to determine the amount of time and other costs spent on the different areas of stakeholder engagements.

16. Goal 2 – Main activities / initiatives Significantly improve visibility to internal stakeholders to create room for strategic discussion. Ensure that the brand promise is also part of the staff’s experience. Seek balance between visibility, quality of our product and growing the skills of our staff. Intensify the use of social media platforms to engage directly with the public. Contribute to capacity building globally and on the African continent. Encourage the private firms that conduct audits on our behalf to align with our visibility programmes.

17. Goal 3: Funding Objective: Execute the AGSA’s mandate economically, efficiently and effectively

18. Goal 3: Funding

19. Goal 3 – Main activities / initiatives Review of our funding strategy Pursue further maturity of our finance systems and implement conscious cost-cutting programmes / austerity plans Closely track all strategic initiatives to enable faster decisions and direct resources appropriately. Continue to negotiate direct appropriation of municipal audit fees from the National Treasury. Engage key government stakeholder to influence the debt payment by auditees

20. Goal 4: Strengthen our human capital Objective: To achieve a motivated, high-performing and diverse workforce

21. Goal 4: Strengthen our human capital Objective: To achieve a motivated, high-performing and diverse workforce Note: This targets are only applicable at organisational level. BUs will be measured on implementation of people plans as approved by relevant CEs

22. Goal 4 – Main activities / initiatives 3-pronged strategy: Development of leadership competence, talent management and creation of an environment for a high-performing and ethical workforce. Talent management • improving the talent-sourcing mechanism • developing and monitoring talent in the AGSA • monitoring occupancy levels and reducing staff turnover rates throughout the business units • implementing a total reward strategy.

23. Goal 4 – Main activities / initiatives Leadership competence and performance – augmenting the capacity and performance of our leaders through: • Providing executive coaching and mentoring • Ongoing competency assessment and development of the AGSA leadership • Developing and strengthening the leadership pipeline for succession planning • Enhancing the level of team effectiveness • Participating in executive development programmes • Best practice knowledge sharing with other SAIs

24. Goal 4 – Main activities / initiatives Learning and development - enhancing and developing the skills and competency base of our employees through: • Maintaining an effective TA scheme • Further strengthening our pipeline through providing external bursaries and partnering with stakeholders in the auditing industry. • Growing qualified audit professionals belonging to various professional bodies as part of the desired professional qualifications profile • Enhancing the learning and skills development interventions for continuous growth of our employees

25. Goal 5: Leading by example Objective: Adhere to standards of excellence Objective: Maximise our contribution to transformation

26. Goal 5: Leading by example Objective: Continually improve timeliness of our reports

27. Goal 5: Leading by example Objective: continually improve timeliness of our reports

28. Goal 5 – Main activities/initiatives Optimising our business processes and information technology Improve connectivity to enable better resource mobility and timely access to information. Step up the ability to process growing data volumes at improved speeds Minimise the organisation’s dependence on paper records allowing faster access to and an in-depth analysis of data. Enhance information-sharing.

29. Goal 5 – Main activities/initiatives Continue to position IT as an important part of strengthening our internal controls. Streamline our business processes even more to ensure minimal disruptions to business Gradually implement new audit software - to gain efficiencies, facilitate better interaction between the teams, improve remote access and enhance user experience. Automate the CWC process to minimise the time of processing the allocation of outsourced work

30. Note: our organisational strategy has embedded various aspects of economic, cultural and social sustainability in the five strategic goals, here the focus is on the environmental aspect of our sustainability. Sustainability – Main activities/initiatives Optimise and integrate our reporting procedures and process Improve our information systems to enhance integrity and quality of our sustainability reporting information Continuously assess our carbon footprint Monitor and evaluate environmental sustainability initiatives.

31. BUDGET 2014 - 15

32. Budget overview

33. Income statement overview

34. Capital expenditure